[members-discuss] [ncc-announce] [GM] Draft RIPE NCC Charging Scheme 2025 Proposals

Dear RIPE member,

Kaj Niemi is absolutely right: RIPE increasing its budget does not serve
the interests of its members, and allowing it to pass because you are
spending other people's money is a sign of bad judgement and lack of
accountability.

For years, I was wondering why RIPE was handing out /22 blocks at what was
effectively a fraction of the market price. I think we have the answer now:
Membership fees and diluted voting power of each member served the
interests of the management just fine.

RIPE is a mandatory phonebook for IP addresses, nothing more and nothing
less. All the fat that has grown on the organisation in the last decade
must be trimmed, and I call for a drastic budget reduction - if some
members are willing to spend their own money on additional services, they
should be free to do so, but with absolute emphasis on this part: their own
money.

>From a fairness perspective, RIPE should be granted the necessary funds to
run the database service, meaning:

- A base fee to keep the database service running, shared equally by all
members
- Fees on actions that require manual work from the RIPE NCC (e.g.
transfers, mergers etc)

Forget about levying higher taxes on larger members - RIPE is not a tax
collector and doesn't exist to offset differences in wealth. It exists to
deliver a necessary service, and each member should pay according to the
burden they place on the organisation.

How much should we pay for a database service? In the ideal world, there
should be no monopoly on the service and we could let the market forces
decide what the right price is.

I realize that might not be feasible right now, so we are stuck with the
next best solution: Letting the community figure out what the acceptable
price is - I guess most RIPE members run some sort of database service of
their own and therefore possess a profound understanding of the associated
costs.

Until we have better data, I suggest we look at the past for inspiration:
Use the budget for 2014 (€ 22 millions) and adjust for inflation - that
amounts to approximately € 28 millions.

To get there we can slash External Engagement & Community (€ 9,4 millions
in the 2024 budget) - RIPE is a monopoly, and the members will be there
regardless of the activities in that area.

I also suggest that we take a look at the expenses associated with the
Office of the Managing Director (€ 2,2 millions in the 2024 budget) - after
all, RIPE is an organisation with less than 200 employees.

I call for members of the community to contribute: What is the right amount
of staffing in the RIPE NCC?

Regards,

Yoel Caspersen
CTO
Kviknet.dk ApS


On Wed, Apr 10, 2024 at 3:12 PM Kaj Niemi <kajtzu at basen.net> wrote:

> Hi,
>
>
> Very politely put I do not think any of the three proposed charging
> schemes are in the membership's interest - they certainly aren't in mine.
>
> All three seem to be designed to assure that NCC can continue along,
> business as usual, with its tasks. Thus, we could pretend that there isn't
> a big issue with the membership numbers declining. We could also pretend
> there isn't a real problem with the value proposition of the services.
> Furthermore, we could also pretend that we do not care that it all is
> conveniently funded by the membership. I mean, what is 1500 or 1900 euro to
> most people? I have heard the last several times in the past. After all,
> why should we care about the expenditure when the sums are so small for
> each LIR? Why should we care when it is not our own money? I'll tell you.
> Not caring about the transaction size is bad, if you are willing to let
> these kinds of sums slide, you'll let it slide on bigger amounts. As is
> treating other people's money (OPM) differently than if it were your own.
> These eventually lead to lack of accountability.
>
> What is being proposed is really a significant increase in membership
> fees. In particular, significantly above what it used to cost on average to
> produce services for each member (whether they use them or not). Note when
> I say what it used to cost, as in FY2024 the cost per LIR will be higher.
>
> Now, with the membership in further decline the average cost per member
> will once more be higher in FY2025. Next year, I forecast that we will have
> the same "discussion" for FY2026 as NCC comes around and asks for more
> money. Once again. Why? Because according to projections the amount of
> members will continue to decrease resulting in higher fees per
> organization. Once again. All in the advantageous name of the articles of
> association that allow pretty much anything.
>
> Following the above rational thought with another is, that what one should
> be doing is choosing what to either invoice separately or drop completely.
> Yes, really. Everyone is happy with free services, it is when you apply the
> money test - request someone to pay for something - when you see if what
> you create contains value.
>
> Considering NCC managed to "save" 5% in the FY2024 budget compared to
> FY2023, asking for 8.1% increase (4% annualized) the next year is, well,
> kind of cheeky. It restores the budget pretty much to what it would have
> been with two annual increases. As an exercise in budgetary engineering I
> do approve. As a paying member I do not.
>
> What really would be needed is competition. Competition would make the RIR
> market more efficient. It is rather obvious that the RIR markets aren't
> anywhere near the efficiency they could be at. Competition would mean that
> people wanting to pay 1900 - or even more in the future - could choose to
> do so and those who don't want could potentially pay less. Reduced to the
> very basics one is paying for bits in a database. In that sense this is
> rather similar to the certificate market where at one time the cost per
> certificate was sky high and there were only a few issuers. Today, I am
> guessing most do not pay thousands annually for a few bits in theirs.
> Neither do most people care whether the cert was issued by Verisign, Gandi
> or someone else. Having looked into it out of curiosity, real competition
> does not seem to be possible as the principles in ICP-2 pretty much state
> that there can/should only be one RIR per region. Which makes NCC the
> definition of a monopoly. Monopolies with nice and polite people, well
> intended purpose and mission creep are not good, they're bad. For everyone.
>
> Finally, the surplus. The concept itself is interesting and I do know
> where it comes from. But from an financial point of view it is really
> lending money to someone else and then (maybe) getting it back, a year
> later, less inflation if they did not spend it.
>
>
> I would kindly request that the EB would add option D or "Option D: No
> Changes from 2023". :)
>
>
>
>
> Kaj
>
>
>
>
>
>
>
> Kaj
> ------------------------------
> *From:* ncc-announce <ncc-announce-bounces at ripe.net> on behalf of
> Simon-Jan Haytink <simonjh at ripe.net>
> *Sent:* Wednesday, April 10, 2024 12:18
> *To:* ncc-announce at ripe.net <ncc-announce at ripe.net>
> *Subject:* [ncc-announce] [GM] Draft RIPE NCC Charging Scheme 2025
> Proposals
>
> You don't often get email from simonjh at ripe.net. Learn why this is
> important <https://aka.ms/LearnAboutSenderIdentification>
>
> Dear RIPE NCC members,
>
> We can now share three draft charging scheme models for 2025 that the
> Executive Board approved with the following resolution at its meeting on 25
> March 2024:
>
> The RIPE NCC Executive Board approves the submission of the RIPE NCC
> Charging Scheme 2025 options to the upcoming RIPE NCC General Meeting for
> members to vote on.
>
>
>
> - Option A  -  Charging Scheme as is with 22.58% price increase for the
> annual contribution per LIR account (EUR 1,900) and a 0% price increase for
> Independent Internet number resource assignments* (EUR 50)
>
> - Option B  -  Charging Scheme as is with 20.97% price increase for the
> annual contribution per LIR account (EUR 1,875) and a 50% price increase
> for Independent Internet number resource assignments* (EUR 75)
>
> - Option C  -  Charging Scheme as is with 16.13% price increase for the
> annual contribution per LIR account (EUR 1,800), a 50% price increase for
> Independent Internet number resource assignments* (EUR 75) and a new AS
> Numbers fee of EUR 50 per assignment
>
> *Resources falling under this charge are IPv4 and IPv6 PI assignments;
> Anycast assignments; IPv4 and IPv6 IXP assignments; and Legacy IPv4
> resource registrations through a sponsoring LIR.
>
> The full draft charging scheme models are available from the GM
> Documentation page:
>
> https://www.ripe.net/membership/meetings/gm/meetings/may-2024/documentation-and-archives/supporting-documents/
>
> Although the proposed models are relatively simple, we provide a
> calculator where you can see exactly what you would pay under each of the
> proposed models:
>
> https://www.ripe.net/documents/3757/CS2025_Member_Calculator.xlsx
>
> The main considerations for the Executive Board in proposing these three
> models are:
>
> 1. The consolidation of LIR accounts, which means the burden to generate
> sufficient income must be met by fewer accounts
>
> 2. Increased costs due to inflation that were previously catered for by
> the large number of LIR accounts
>
> 3. Following the discussions last year and again this year, there appears
> to be no clear consensus among members on how a category-based model would
> work and the Board does not wish to put another category model forward at
> the upcoming GM that will be rejected by the members. Rather, the Board
> will propose a simple model that guarantees adequate funding for 2025 and
> 2026 - under this proposal, we expect there would be no need for a fee
> increase for 2026. The Board will work with the RIPE NCC on a more in-depth
> consultation with the members aimed at arriving at a sustainable solution
> for 2027 and beyond, possibly involving a new charging scheme task force.
>
> All three proposed models are designed to arrive at the same income of EUR
> 41.1 million for the RIPE NCC in 2025. This will cover all current services
> and activities, a 5% staff cost increase, a 2% inflation increase on all
> non-staff costs, and EUR 1 million for additional work relating to registry
> complexity and security projects aimed at ensuring the resilience of the
> Registry and the RIPE NCC more broadly. Any such additional work would be
> discussed with the membership during Activity Plan and Budget consultations
> and then need to be approved by the Board. This will also allow some leeway
> should more LIR accounts close than we expect.
>
> It’s important to note that the RIPE NCC aims for an income budget that
> will provide a surplus, and this means that should we meet our budgetary
> targets, a surplus can be returned to members in 2026 should they so wish.
>
> While the RIPE NCC continues to carry out cost-cutting efforts across the
> organisation, drastically reducing the budget at this time is not advisable
> due to the work that needs to be carried out, especially in relation to
> maintaining high-quality registry services and securing the registry and
> RIPE NCC systems. Cutting services or activities is not something the Board
> is planning to do, and such actions would take time and need full
> consultation with the membership. An overview of the activities and
> services that the membership fee covers is provided below this email.
>
> I also urge you to see the presentation we delivered at the charging
> scheme open house in March so that the full context of the situation and
> the financial landscape we face is clear to you. The slides are available
> at:
>
>
> https://www.ripe.net/membership/meetings/open-house/ripe-ncc-charging-scheme-2025/
>
> Finally, I want to thank all those who have contributed to the
> consultation so far on the RIPE NCC Charging Scheme 2025. The models we
> present here are draft and in two weeks we will announce the final proposal
> that members will vote on at the GM on 22-24 May. Please discuss the draft
> proposal on the members-discuss at ripe.net list - any input received by 19
> April can be incorporated if possible into the final models we propose. And
> make sure to register for the GM so that you can vote on the charging
> scheme that will apply for you and all members next year:
>
> https://my.ripe.net/#/meetings/active
>
> Simon-Jan Haytink
>
> Chief Financial Officer
>
> RIPE NCC
>
> Services and Activities Covered by the Member Fee
>
> - A trusted, efficient, accurate and resilient registry that guarantees
> uniqueness of resources held by members
>
> - Neutral information services uninfluenced by commercial or government
> interests that allow both the RIPE NCC and the community to carry out
> useful research into the Internet
>
> - Engagement activities, including RIPE and regional meetings, that build
> an active membership and community and that contribute to the overall good
> of the Internet
>
> - A voice and influence for the membership in key decision-making fora,
> including with governments and regulators
>
> - Protection of the Joint Internet Number Registry as developed by the
> Internet community
>
> - Learning and development activities that help to address skills
> shortages and contribute to an educated membership
>
> - Support for the Policy Development Process (PDP)
>
> - An authoritative registry of routing information provided by RPKI and
> the RIPE Database
>
> - K-root and DNS services
>
> - A dedicated staff with considerable expertise contributing to all of the
> above
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